FEBRUARY 25, 1982
Canada/U. S. Relations: 1982
AN ADDRESS BY The Honourable
Paul H. Robinson, Jr., AMBASSADOR OF THE UNITED STATES OF AMERICA TO CANADA
CHAIRMAN The President,
BGen. S. F. Andrunyk, O. M. M., C. D.
Distinguished guests, members and friends of The Empire Club of Canada: The undefended border between Canada and the United States of America, stretching for over five thousand miles, has stood for well over a century as a symbol of the unique friendship between two proud and free neighbouring nations. It is a friendship that has deep roots nurtured by the sharing of common values from the past and common aspirations for the future. It is a friendship that has an important lesson to teach to the rest of the world.
But friends and neighbours are not immune from periodic irritations and differences of opinion. Good friends, however, know how to resolve their differences. They can discuss them with utmost frankness and in a spirit of goodwill to reach agreements which are mutually beneficial.
Today The Empire Club of Canada is honoured and privileged to welcome as its guest speaker a distinguished American who, as his country's chief representative in Canada, will undoubtedly play a leading role in the resolution of some of our differences and in the strengthening of our friendship. His Excellency the Honourable Paul H. Robinson, Jr. was nominated to be the United States Ambassador to Canada by President Ronald Reagan in June 1981 and he arrived in Ottawa a month later. His ties with Canada, however, go much deeper. His ancestry is Canadian. His great-great-grandparents and his grandparents on his father's side of the family were Canadian citizens from the Kingston area. His great-grandfather, Hugh Heron, moved his family after the Civil War to Chicago where he was a publisher and where he was fortunate to have his business survive the great fire of 1871.
But Ambassador Robinson's association with Canada is much more recent. During 1953-1955 he saw active service in the Korean War as a commissioned officer in the United States Navy. During that period of service his ship operated in Korean waters with destroyer units of the Royal Canadian Navy.
He and his wife and daughter have also been frequent visitors to Canada over the years for both business and pleasure.
Following his service in the United States Navy, Ambassador Robinson founded and served as President of Robinson Incorporated, a firm of specialist brokers in group insurance and mutual funds. He developed two additional firms in the 1970s and his companies have offices in five U.S. cities and in London, England, with representation in Australia and New Zealand.
In addition to managing his business enterprises, Ambassador Robinson has served on the executive board of the Chicago Council of the Boy Scouts of America. He is a member of the U. S. Chamber of Commerce and he maintains memberships in several clubs in Chicago and Washington.
Ladies and gentlemen, it is my great privilege to welcome, on your behalf, His Excellency the Honourable Paul H. Robinson, Jr. to this historic club and to invite him to share with us his views on Canada-United States relations.
Mr. Chairman, distinguished guests at the head table, fellow North Americans, ladies and gentlemen: It's a great pleasure to see so many people here today. I would like to read to you the first sentence of the flyer that announced my attendance at this luncheon. It says, "In the U. S. tradition of government appointments, Ambassador Robinson had no previous diplomatic or government service when he took office in Ottawa." With that statement as an opening, it's very good to see so many people here today. As the General pointed out in his introduction, I have founded six businesses in four countries; I can assure you that requires some diplomacy.
In fact, having been in my post for seven months, I am a little surprised to find many similarities between business and diplomacy. There are different pieces on the board, but there are always pieces on the board. As a broker I see great similarities in what I am doing on behalf of my country in Canada and what I did in business. I think the principal differences are that the State Department is run more on military lines, or should I say quasi-military. My naval service helps me in that respect. Also half of what I read is secret or top secret and has nothing directly to do with Canada but with the world situation. It does help to have a good understanding of geography. Outside of those two differences, the similarities between business and diplomatic work are remarkable.
The General also mentioned that my predecessors came from the Kingston area. They emigrated to Chicago, which was a sort of United Empire Loyalists in reverse. But they were always loyal to the Crown. That feeling was passed down through my grandmother and my father and it is with me today. Therefore perhaps it is appropriate that I speak to you today as your guest speaker at the Empire Club.
It is a distinct honour for one to represent the President of the United States in this great and kindred nation. I was pleased when Presidential Counselor Meese, in reviewing the first year of the Reagan Administration, said that one of the accomplishments of the administration was improved relations with Canada. I can tell you that the process is ongoing and that there is a great deal of truth to it. We are communicating more with each other, and that's the beginning of a greater understanding of our differences.
I think John Kennedy best summarized the relationship between our two countries when twenty years ago he said, "Geography has made us neighbours, history has made us friends, economics has made us partners, and necessity has made us allies." We have, in addition to the common heritage of blood, as in my own case, many other areas of common agreement--law, language, literature and a representative form of government. Perhaps that is the greatest element in our mutual and common belief. Freedom and democracy, without question, are our greatest and most prized common possessions.
We are best trading partners. Canada ships forty-one billion dollars worth of goods to the United States each year and we ship thirty-six billion dollars worth of goods to Canada. There are twenty-three million trips taken by Canadians to the United States each year. There are twenty-four million Canadians, so that's a pretty close tie. And we have 5,500 miles of unguarded frontier. This unguarded frontier is the envy of the world.
In my brief tenure in Ottawa I have been with the President and the Prime Minister on three occasions during bilateral meetings. I am pleased to report to you that the two men get along very well as men. They disagree from time to time but they get along very well as men. It's important to report that, because it affects our relationship with each other. It certainly makes my job easier. There have been times during the Diefenbaker/Kennedy and the Nixon/Trudeau periods when the relations were cool. This condition pervades the work of diplomacy in a very negative way. I am glad to say that it does not exist today.
Since coming to Canada we have set up what's called a Joint Consultative Group. The two permanent members are Allan Gotlieb, the Canadian Ambassador to the United States, and myself. There are two or three members from each country who attend meetings depending on the issue. It's an extremely important group, because we are able to head off developing problems by consultation before they become acute. Since this is a two-way street, we are also able to consider matters which previously had been considered closed. It's an open discussion, which we have needed for some time, and it's functioning well.
None of this is to say that we do not have serious problems between ourselves. There is no question that our greatest concern in our dealings with Canada is with the National Energy Program. To be specific, our quarrel is with the retroactive aspect of this program. We don't in any sense oppose the important concept of Canadianization. Indeed, as an American nationalist of Canadian ancestry, I can understand it. What we do disagree with is the method. Without being too technical, we disagree with the retroactive aspect, which amounts to changing the rules of the game in the middle of play. It's completely inconsistent with traditional United States-Canadian relations.
Let me try to explain it to you. If a foreign oil company or developing company were to make an important discovery on Crown lands, it would have to give up to the federal government twenty-five per cent of the asset value of that discovery in return for a
very small ex gratia payment of something less than one per cent of its value. In addition, the company must sell another twenty-five per cent to a Canadiancontrolled company, presumably at a fair market value which would bear a closer resemblance to the actual value of the find. If further development were to take place the company would again give up half its ownership if it made a major discovery. The latter proposition is acceptable because if you know the rules of the game before you start, then you can't complain. Our objection, then, is when the rules of the game are changed in the middle of play. That's the retroactive aspect of the program that specifically says that we played under one set of rules but we'll now take an additional twenty-five per cent without paying for it, as of the date of the announcement of the National Energy Program in October 1980. So we ceaselessly discuss this matter with our Canadian friends and I would hope that at some point we will be able to get mitigation of this aspect of the National Energy Program.
You have heard of the Foreign Investment Review Agency. We have taken Canada to GATT for the first time in twenty years; it's not something we do very often. We are concerned with the bureaucratic growth of this agency. We don't see anything wrong with your country requiring companies to bring significant benefit to Canada. But in its seven years of bureaucratic growth, this agency has actually been acting in restraint of trade. We must resolve this matter. I think we can. In any event, it's heartening to know that the November budget indicated that the agency would not be expanded as previously announced and that it would come under review. The budget also indicated that the National Energy Program would not be expanded to other sectors with which we are in agreement.
The Alaska Natural Gas Transportation System, or pipeline, is a matter of great interest to both countries. The cost of this project is something over forty billion dollars. It is hard to imagine any non-military project which would cost that much money, but that's the current estimate. In fact, some estimates go as high as forty-three million. It's good for both countries. It will allow the United States to bring its natural gas down from Alaska to the lower forty-eight, and it is generous of Canada to allow use of Canadian lands to do that. It's important to us not only from the standpoint of energy self-sufficiency but from the standpoint of national security. The administration took the first step and passed a seven-waiver package to the Congress in December. That took a great deal of political clout. It wasn't quite as difficult as the AwAcs, but it was still a hard thing to put through. And we did it.
The other half is only the small matter of getting forty billion dollars to build it. I discussed it with the Bank of America two weeks ago and later with ARCO. I go to New York on Monday and Tuesday where I'll be seeing the other three sponsoring banks. If I were asked to give a percentage figure I would say that the chances are better than even that we'll build the pipeline. But I don't want to say that it's a certainty, and that's why I am involving myself with it. In a sense, if you want to look at this from the standpoint of Canadian history it's almost like building the CPR. It will help develop Canada's northwest as well as Alaska, and for that reason, Canada has an interest in it too. I pledge to you that we in the administration will make every effort to get private financing for this very important project. We will co-operate in all respects with banking interests in Canada and in the United States to make this investment on the part of American industry and banking as palatable, as fair and as good as possible, so that we can complete the pipeline.
We are under attack by people in Canada and conservation groups in both countries on acid rain. I have been involved with this. In fact, there was a meeting yesterday in Washington, where an agenda was agreed upon. This is the third meeting we have had on acid rain. The first one in June was unsuccessful because the two negotiating teams didn't get along. The second one was in Ottawa in early November. I met everybody on both sides, and they were optimistic. As long as we are working together towards negotiating a treaty or an executive agreement we are taking the right steps.
We feel acid rain is a joint problem. Fifty per cent of the acid rain that falls on Canada is generated in the United States or you could put it another way; fifty per cent is generated in Canada. It is a joint problem we are taking steps to rectify. We are going to have to devote billions of dollars from each country to solve this problem. We, in the United States, feel that we really do need more scientific evidence on what acid rain is and how we can best stop it. This is not a stall. We must have more scientific evidence, and I am confident we will have it.
The Great Lakes Water Quality Agreement, which was signed in 1972 after three years of negotiation and scientific study, is a good example of what can be done. It's been extremely successful. So we have a precedent of working with Canada which we certainly intend to continue.
You may recall that a year ago, the President came to Ottawa on his first visit to a foreign country after his inauguration. Before he did so, he split off the boundaries issue from the Fisheries Treaty because he knew that otherwise the boundary side would not get through the Senate. I can assure you it would not have. It's not just because of the objections by a group of New England senators, but because other people have felt that we gave away the store. Whether we did or not I cannot say, because I was not involved in any of the negotiations. As a result of the split, the Boundary Treaty went through the Senate by a vote of 97 to 9. It has been approved by the Canadian Cabinet and is now at the World Court in the Hague. The fisheries side is another issue, and it is going to take some time before we can meet all of Canada's objections. The New England Fisheries Council has a new management plan which meets the former Canadian objections half way. This is not the final end of this argument, but it is a step in the right direction.
The ongoing negotiations between the government of Canada and the New England Fisheries Council hopefully will produce the basis of a treaty, or at least an agreement that will be in the interests of both Canadian and United States fisheries. I might mention that the west coast Albacore Tuna Treaty was concluded in July, and was eminently reasonable in my view. Both sides are happy with it. So we do make progress, even on the fisheries side. In all of these negotiations and bilateral discussions I feel that my personal job is to keep the lines open and the lid on. We often have a great number of problems with people speculating on the difference between our two countries when in fact those differences aren't all that great. Headlines sometimes don't follow copy and copy doesn't always follow what was said.
Canada is our closest NATO ally. We share together the common defence not only in NATO but for the North American continent. For twenty years, the Soviet Union has embarked on an unparalleled military buildup which bears no relationship to legitimate needs for defence in the world today. Moreover, the Soviet use of Cuban and East German surrogates in Africa and the brutal invasion of Afghanistan have given rise to considerable alarm in the free nations of the West. This necessitates a re-evaluation of our position in light of the worldwide strength of the Soviet Union today. In describing his plans for defence expenditures of $180 billion over the next five years to upgrade forces to meet this threat, the President said recently: "It is my hope that this program will prevent our adversaries from making the mistake others have made and deeply regretted in the past, the mistake of underestimating the resolve and the will of the American people to keep their freedom and to protect their homeland and allies."
What are the trends in the world today? In the last ten years, United States expenditures for arms appropriations were reduced by twenty per cent while the Soviets increased theirs by fifty per cent. The net difference is $270 billion of greater expenditure on defence by the Russians than by the United States.
What is the balance of forces? Let me give you some ratios. In tactical air groups there are twice as many Russian as United States groups. When you add the NATO and Warsaw Pact forces respectively these ratios remain the same. In submarines, the Soviets have 370 ocean-going fleet submarines. That's three times what the United States has. In artillery, the Russians have 20, 000 field pieces. That's four times what we have. In tanks the Soviets have 50, 000, which is five times that of the United States. In summary, then, it's two to one in tactical air groups, three to one in submarines, four to one in artillery, and five to one in tanks. These, ladies and gentlemen, are sombre facts. But facts they are. I think it is right for me to bring this to your attention, particularly as a representative of your close NATO ally and friend.
The NATO Alliance has agreed to increase defence spending in real terms, three per cent per year, but three per cent of nothing is nothing. Canada is below three per cent as a percentage of gross national product. The United States is currently spending 5.6 per cent of GNP towards national defence and increasing it to 7.5 per cent. Great Britain, for example, is at 5.2 per cent while Canada is in fact under two per cent. I might add that in the last twenty years the Soviet Union has been averaging twelve to fourteen per cent of their GNP towards defence. We were gratified to see an increase in Canadian defence spending in the November budget of eighteen per cent in each of the next two years.
There is even more to be done. I was aboard Canadian destroyers recently. I can tell you that the officers and men are first-rate, as they always have been. The ships which I was aboard were Tribal Class and were also first-rate, but the other sixteen Canadian destroyers are steam driven. You have read about their boiler problems and how serious those have been. The sixteen steam driven ships are obsolete now. By the time the six new frigates are built, if in fact they are built, in 1987, that will leave you with only ten ships--the six new ones and four Tribal Class which by then will be three-quarters of the way through their normal life. So, in all frankness, there is a great deal to be done to guarantee your own sovereignty as well as to meet our joint requirement of defending the North American continent.
When we think of Canada's part in defence, we Americans remember that you were in both world wars before we were. No one is pointing an accusing finger at Canadians or Canada. It's just that we want to try to help wake up the Canadian people to the seriousness of the defence situation today. When we think of Canada's part in world history we think of Ypres, the Somme, the Vimy Ridge, the North Atlantic, Dieppe and Normandy. We know we can count on Canada when the chips are down. We just say that you must become more fully aware that this situation exists.
I want to tell you of a great experience I had since coming to Ottawa. I went to the dedication of the Ford Museum in Grand Rapids and flew back with the Prime Minister. I was in his limousine when we went from the hotel to the airport. The maple leaf flag was flying on his limousine, and it was a wonderful thing to see the American people smiling and waving frantically at the Prime Minister and at the Canadian flag. It was a very moving experience. As we drove towards the airport, a young man who was standing with his wife, saluted the Canadian flag. I thought that was very appropriate.
A few months later, during my visit to Winnipeg, I was travelling in my car with the American flag flying. The traffic slowed and a great many young people and children, some of them in the back seats of cars ahead of my car were waving at me and the American flag. It was the same reaction of the people I had seen Americans give to the Canadian flag. One young man, about the age of twenty-five, stood and saluted the United States flag as I drove by. I was greatly moved by that gesture. I think that this is an example of our respect, regard and affection for each other and this is appropriate to pass on to you today.
Finally, I would like to say that in my tenure as the United States Ambassador to Canada, I will always state the United States position as clearly and concisely as possible in the spirit of fair play and good will that has actuated our relationship for over 150 years. I am sure that I can count on Canada to do the same.
The thanks of the club were expressed to Ambassador Robinson by H. Allan Leal, Q.c., a Past President of The Empire Club of Canada.